Sunday, November 26, 2017

Germany to Jump to Russia � U.S. Deep State has Lost

The latest rumblings from Berlin suggest that the SDP is going to cave, once again, and become the junior partner in Merkel's CDU-run government. This comes after the collapse of the so-called Jamaican coalition talks (CDU, Greens, and FDP.) You could smell that fiasco in the middle of North America. But that attempt comes after the SPD and CSU lost significant fractions of their vote in the last election and needed new blood. But Greens and FDP? That would be like Bernie Bros hooking up with the Koch brothers. (It seems to me that any coalition named for Jamaica should be negotiated to the sweets sounds of Bob Marley and good Ganja and the Krauts probably tried it with polka, bier, und schnapps.)

Of course, the interesting question is whether the German government will keep pursuing their hopelessly stupid neoliberal agenda because that is what the crooks at Deutsche Bank want, or will they begin catering to the industrial interests that really keep the economy going. (Producers vs Predators, ja) The problem with running a Producer agenda is that it is exactly what the EU and USA does not want.

My take is that while an economic realignment is seriously overdue, it will face major hurdles. The Neoliberals will not give up easily. On the other hand, there are elements in the German psychic that really like doing business in Russia and so this may lead to Germany abandoning sanctions. Luongo below has thoughts on this.

Germany to Jump to Russia � U.S. Deep State has Lost

Stratfor's George Friedman can't tell you the real story of why Germany has no choice but Russia.

Tom Luongo, 10/24/17

How do I know this? I didn�t write that title for click-bait or SEO purposes. I wrote that title because it�s true. This article will be one part geopolitical treatise and one part tutorial on how to read what isn�t said as much as what is said and, most importantly, who is/isn�t speaking.

We start with none other than Mr. CIA mouthpiece himself George Friedman. Freidman is the head of Stratfor, one of the most influential Washington D.C.-based �intelligence� organizations around. In the past I�ve subscribed to Stratfor simply to find out what narratives the U.S. government wants me to believe.

Deep State Intelligencia

Stratfor�s intelligence is a masterful mixture of the truth wrapped up in a neat little ball spinning you like a fidget spinner. Friedman is the Dumbledore of Stratfor, speaking half in riddles. But as an insider with access to the real story and blithely, almost imperceptibly, not telling you anything of value he guides you towards a particular side of the story.

People like Friedman absolutely need to be read. But, read them with the most skeptical eye. The intelligence is in knowing where the focus will be next. So, Friedman talking about how the Germans are about to be seduced out of necessity by the evil Russians is significant.

The focus of Deep State policy will move away from Syria and even Iran to try and shore up their position in Germany which has deteriorated alongside Chancellor Angela Merkel�s popular support.

Friedman lays out Germany�s choice: figure out a way to salvage the EU or turn to Russia to get what it needs to grow. This is the essence of Germany�s problem. But Friedman lays it out in the most intellectually dishonest way imaginable.

And in doing so he makes the reader feel intelligent. That�s the pernicious part. That�s the �Master Persuader� part that Scott Adams talks about all the time. And that�s the part you have to watch carefully.

Deep State Russian Lies

Friedman uses sleight of hand to tell us that Germany needs Russia because:

Germany needs Russian raw materials. It also needs the Russian market to be far more robust than it is so that it can buy more German goods.

But Russia is incapable of rapid economic development without outside help, and with the collapse of oil prices, it needs rapid development to stabilize its economy. Germany needs Russia�s economy to succeed, and what it has to offer Russia is capital, technology, and management.

In exchange, Russia can offer raw materials and a workforce.

An alignment with Russia could settle Eastern Europe in Germany�s orbit.

This all sounds good. The conclusion is true. But getting there it a lie to suit the narrative. Germany needs strong exports to grow. Russia doesn�t. Germany needs raw materials. Russian doesn�t need technology. It has that technology it hasn�t deployed it to the private sector�. Yet.

Up to this point Germany has used southern Europe as its dumping ground, trading Italian and Portuguese sovereign debt for BMWs.

But that scheme has reached its limit and is tearing the EU apart. Germany doesn�t want to stop this arrangement nor does it want to pay its �fair share� of the burden for its resolution, i.e. debt relief for what it considers the �Club Med� countries.

German politicians like Merkel have exploited this cynically for political gain but, now that we�ve reached the debt limit she�s been exposed as nothing more than mouthpiece for U.S. Deep State policy, not the leader of Germany.

The U.S. wants a united EU, through NATO, to combat Russia geopolitically and so everything is frozen in this Cold War stasis that is resulting in major populist uprisings against Merkel�s enforcement of it. The costs are being paid by the younger generations now born into de facto debt slavery.

Russia, for its part, is not the Russia of even five years ago. It continues to leverage its robust energy sector to fund the broader economy. Putin made the switch from subsidizing Rosneft and Gazprom to agriculture and manufacturing in 2015. Igor Sechin howled. Putin ignored him.

Friedman knows this and yet peddles the same �Russia is a gas station on the way to China� meme that still works on Congress. He also knows that this was always Putin�s plan to first stabilize Russia and then remake it.

And that�s what scares him and the neocons he represents.

Putin used the energy sector to improve the lives of millions of Russians while waging a war of financial and territorial attrition against an aggressive U.S. Then made a stand (Syria) and reversed the entire board while defending the strategic positions of its energy sector.

While that played out, he redirected state funds away from energy at the crucial moment during the ruble crisis, which now can stand on its own, towards the broader economy. That part of the plan is just getting started. See my latest article at Seeking Alpha for a taste of what�s happening.

Once institutional investors realize that Friedman is selling them nonsense, the money will flow into Russia through a multitude of new channels that will help Germany make the right choice.

Germany�s Real Choice is not the Deep State

Germany�s real choice is, as Friedman suggests, to cut a new deal with Russia. Yes, Germany needs access to a vibrant Russian market but that will happen with or without Germany thanks to China�s Belt and Road Initiative and its own dramatic military and diplomatic victories in central Asia and the Middle East.

Germany has no choice looking West. Britain is a shell of a country hanging on by the skin of its financial sector teeth. Western Europe is tapped out and needs to exit the euro, devalue and default on its debt to begin again and the U.S. will struggle with the same problems once Europe is finished working through the worst of theirs.

The only rational choice is Russia with its

17% debt to GDP ratio,

Intelligent trained workforce

Access to markets that will be the engines of growth past 2020

Its strengthening ties to the �buffer states� of Eastern Europe that will likely exit the EU

It is this choice that was truly reflected in the German election results last month, not the anti-immigration policies of Alternative for Germany (AfD). That certainly played a role, but Merkel�s troubles in Bavaria are her real problems and Bavaria wants normalized relations with Russia.

And if she doesn't craft a cabinet that supports that, she won�t be chancellor for much longer.

And that�s the real story Friedman won�t tell you because it admits defeat. more